2.4- resource management Flashcards
Name the 4 methods of production
- job production
- batch production
- flow production
- cell production
What is job production
making one-off items to suit customers individual requirements
What is batch production
makes group of products to 1 specification at a time , allowing some variation in products, yet some specialisation
What is flow production
continuous production of a single standardised product
What is cell production
involves organising workers into small groups/ cells that can produce range of different products more quickly then job production
Name 2 benefits of job production
- charge higher price -> products made to exact needs
- work is more interesting for staff
Name 2 drawbacks of job production
- cost per unit- very high due to high skill & low levels of production
- finding staff with enough skill is hard, pay will be high
Name 2 benefits of batch production
- allows variation in product made
- faster then job production as making a batch speeds up production
Name 2 drawbacks of batch production
- more costly to set up then job production due to machinery
- cost per unit will be higher then flow as machinery will need to be adjusted
Name 2 benefits of flow production
- unit labour costs are extremely low
- huge volumes allow huge demand in mass markets to be met
Name 2 drawbacks of flow production
- high initial costs of installing machinery
- products need to be identical
Name 2 benefits of cell production
- group working allows ideas to be shared for improvements
- can adjust products to suit customers needs
Name 2 drawbacks of cell production
- costs still high as heavily relies on people
- production volume wont be as high as flow production
What is productivity
measure of efficiency of the production process. output per worker per time period
Give the equation for productivity
total output / number of workers
Name the3 key factors influencing productivity
- quality and age of machinery
- skills and experience of workers
- level of employee motivation
How are productivity and competitiveness linked
- higher levels of productivity -> lower unit costs -> sell at lower price -> more competitive
What is efficiency
measures how resources generate output without wastage
How does quality and age of machinery effect productivity and efficiency
- new machinery works faster -> breaks down less
fewer breakdowns -> fewer faults -> newer machinery produces with more accuracy
How do skills and experience of workers effect productivity and efficiency
high skilled staff -> produce quicker -> more experience -> complete tasks quicker
skilled staff make fewer mistakes, experienced staff can spot problems -> product made quicker
How can level of employee motivation effect productivity and efficiency
motivated staff -> more focused -> work quicker
more motivated -> more pride in work -> less errors
What is labour intensive production
production process relies heavily on human input with little use of automation
What is capital intensive production
uses high levels of automation, reducing role of humans, replacing them with machines
Name 2 key issues with labour intensive production
- labour costs -> very high
- managing labour costs- critical, may force firm to move abroad
Name 2 key issues with capital intensive production
- initial costs will be very high, with the need to invest specialist machinery
- low running costs
What is capacity
maximum possible output of a business
What is capacity utilisation
the proportion of maximum capacity being used by the business
What is the equation for capacity utilisation
current output / maximum possible output x100
Name 3 things under-utilisation of capacity can cause
- lead to fears of job security, demotivating
- cause poor morale among managers
- create poor reputation for the business
Name 2 problems with over utilisation
- firm may not be able to accept new orders, turning away new customers
- little or no time to carry out maintenance on machines
Name 2 ways of improving capacity utilisation
- increase current output (through marketing)
- reduce maximum capacity (selling off assets or laying off staff)
What is stock
materials, partially made products & finished goods owned by business that havent been sold
What are buffer stocks used for
a minimum level of stock or raw materials used in production and finished goods at all times
What are the reasons for keeping buffer stocks of raw materials
- if deliveries are delayed, buffer stock allows production to continue
- if a batch of supplies is faulty the buffer stock can be used to continue production
Name 2 reasons for keeping buffer stock of finished goods
- helps to ensure businesses can always supply customers
- allows firm to accept rush orders
Name 5 problems associated with too much stock
- opportunity cost: ties up capital and prevents money being spent in other ways
- Cash flow problems: cash has been spent on the stock but the stock has not yet turned into cash
- increased storage costs: takes up space
- increased financing costs: if stock purchased with borrowing money, interest will need to be repaid
- increased wastage: some stock may go off and wasted
Name 3 problems associated with too little stock
- lost customers : if supply doesn’t meet demand, customers will be lost
- delays in production: if no materials standing then machinery cant run
- Loss of reputation: if word gets around that business doesnt have enough stock then loss of customers
What is just in time stock management
with no buffer stock, relies entirely on frequent small deliveries of materials from suppliers being delivered without delay and without any quality problems
Name 2 key points about just-in-time stock management
- suppliers must be willing to deliver frequently
- deliveries must be absolutely reliable
Name 3 ways just-in-time stock management helps with waste minimisation
- less stock held, less likely to be wasted
- cash is not tied up in stock - wasting it
- removing buffer stocks helps to highlight problems in production process
What is lean production
range of Japanese techniques to eliminate waste from business processes
Name 4 ways lean production improves how businesses are run
- more input from staff
- a focus on quality
- fewer wasted resources
- focus on reducing wasted time
Name the 3 main methods of managing quality
- quality control
- quality assurance
- total quality management
What is quality control
involves checking output to find any faults in a production system
What is quality assurance
focuses on producing methods of preventing quality problems arising
-checklists or procedures that are part of company policy
What is total quality management
members of staff having the mindset of getting things right the first time
Name 2 positives of total quality management
- should become deeply rooted into company culture
- once all staff think about quality it should show through design and manufacture
Name 2 negatives of total quality management
- staff sceptical of management initiatives
- to get TQM into business may be expensive, requires training
Name 2 positives of quality control
- can guarantee no defective item leaves factory
- requires little staff training
Name 2 negatives of quality control
- leaving quality for the inspectors to sort out may mean poor quality is built into product
- QC cannot be trusted if based on sampling
Name 2 positives of quality assurance
- makes sure quality is tested at every stage
- some customers like the reassurance of keeping records
Name 2 negatives of quality assurance
- does not promise a high quality product
- may encourage complacency, suggests quality is sorted
What are quality circles
a group of staff who meet regularly to find quality improvements
Name 4 things quality management leads to?
- allows a premium price to be charged
- helps gain distribution, retailers know they wont need to return
- it creates brand loyalty and repeat purchases
- can help build a brand reputation that spreads to other products
What is continuous improvement (kaizen)
- encourages staff to put forward stream of small ideas on how to do things better
- small but frequent changes
- help to improve productivity
What is capital intensive production
uses high levels of automation- reducing role of humans
What is the major negative implication of under-used capacity
fixed costs per unit will be higher
Name the key features of the stock control diagrams
- max stock level- affected by amount of space firm has avaliable
- minimum stock level- amount of stock firm aims to always have
- re-order level- when new order for stock is triggered
- reorder quantity- jump vertically upwards- ^ stock level at start of months 4 & 7
- lead time- gap between order placed & stock arrival time
What are the importances of quality when selling products
- legal & ethical consequences- ensures business meets consumer legislation acts
- costs/ efficiency- when defects produced- wastes resources: time of employees (salary), materials
- price- mistakes -> resources wasted -> ^in price charged -> damages competitiveness
- competitiveness -> good quality enables firm to price competitively
- good quality -> staisfied customers -> pick u over subsitutes -> ^ sales vol -> ^ market share
- branding & word of mouth -> satisfied customers -> recommend products
- bad quality -> affect reputation
Definition of quality
product/ service is of good quality if it meets the needs & expectations of the customer
Discuss 5 benefits of greater quality for a business
-customer satisfaction
-higher customer loyalty
-lower marketing costs
-customer recommendations
-repeat purchase
How can good quality products lead to a competitive advantage
-> enables a business to differentiate its products from competition
How can good quality products lead to a competitive advantage
-> differentiation
-> develop a reputation
Porivde examples of poor quality
-product doesn’t perform right
-products delivered late
-poor customer service
-product fails
Disadvantages of poor quality
-lost customers
-competitive disadvantage
-costs of remaking product
-costs of replacemet/ refunds
-wasted materials
